Much has been said about the financial disparities between the member states of the European Union. Right now the willingness - some would call it an obsession - of keeping Greece within the EU has resulted in setting aside another chunk of euro billions to patch over Greece's insolvency. According to the latest reports 31.5 billion euros are waiting to go to Greece which the nation needs to pay its debts. “We need to find creative solutions,” AustrianFinance Minister Maria Fekter said.
One could phrase the situation as follows.
Someone is so much in debt that he can't even pay the instalments. So he gets more money with further conditions attached. Why yet another loan should suddenly solve the problem is anyone's guess.
So, for the lender the money paid to the borrower is now lost to the account of the former (where it could have done more work), instead it is in the coffers of the latter where it causes things to get worse. The idea is of course that eventually all these sums get repaid, but that is not happening.
What if the additional sum is not paid in full, but minus a percentage which is used to earn interest for the lender (that side of the economy works, remember), the interest thus earned is diverted to the borrower who needs it. The conditions there are less onerous, and the total loan is not growing as it otherwise would. The result - less turmoil on the borrower's side, less angst for the lender, and in overall terms the money has never left the entire bloc anyway.
What of those flowers? Let's say there is a sick flower bed; no amount of watering and fertiliser help. One option is to grow the same flowers somewhere else where they are healthy and introduce some plants gradually into the sick group to slowly take over. In essence the approach is the same.
Perhaps the time has come to be more creative after all.